Goldman Sachs in hot water over short sales

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Goldman Sachs in hot water over short sales

Korea’s financial regulator said Monday it has launched an investigation into the Seoul branch of Goldman Sachs Group over settlement failures on short sales.

A short sale was made by the Seoul branch of Goldman Sachs last Wednesday, but about 1.3 million shares worth some 6 billion won ($5.6 million) were not delivered for settlement until two days later, the Financial Supervisory Service (FSS) said in a statement.

The short selling demands were on three Kospi stocks and 17 Kosdaq stocks.

The FSS said a bookkeeping error may be behind the failure.

The inspection will end on June 15 and be extended if necessary, the FSS said.

Short selling refers to the sale of borrowed shares in the hope of making a profit from a price fall by buying the shares back at a lower price.

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